Member Briefing April 4, 2025

Posted By: Harold King Daily Briefing,

With Tariffs Announced, U.S. Businesses And Consumers Count The Cost

We now know what many (but not all) of President Donald Trump’s tariffs are set to be: 10% minimum on imports, with exemptions for semiconductors, pharmaceuticals, lumber and certain minerals. For many countries' goods, the levy will be much higher. Just a year ago, the average tax on goods coming into the U.S. was 2.5%. Now it's 22.5%, according to Fitch Ratings — the highest in more than 100 years. So now that we have those numbers, what are we going to see on shelves and in grocery carts?

Homebuilders expect construction prices to climb more than $9,000 for a single-family home, according to the National Association of Home Builders.

Goods from several Asian countries got the highest tariffs — 54% in some cases. That’s where we’ll feel the biggest sticker shock, said Kylie Cohu, a vice president at the Jefferies investment bank. “Consumer electronics, those are definitely exposed. Footwear, as well as apparel, is highly exposed. Anything kind of with a textile, as well as toys and games and even some parts of furniture,” she said.

Automobile costs will also rise. For models made or assembled in the U.S., AEG estimated tariffs could cost an additional $2,500 to $5,000 for budget cars, $5,000 to $8,000 for mid-sized vehicles, and between $10,000 to $15,000 for SUVs and luxury models. Cars imported from Europe and Asia may have a potential tariff impact of $8,000 to $10,000 for smaller models and up to $20,000 and beyond for luxury, SUV and sports models, the consultancy firm estimated.

UBS economists now predict inflation will soar to 4.4% this year and stay above 4% in 2026. Deutsche Bank economists say real gross domestic product growth could fall below 1% this year, at which point the economy tips perilously close to recession. The unemployment rate, they predict, could rise to 5% this year.

Read more at Marketplace


What Products and Which Countries Are Exempted From Trump's Tariffs?

The White House said a number of goods and economies will be exempted from the reciprocal tariff policies. These include:

  • Canada and Mexico, which are subject to their own tariffs previously announced. These countries also have exemptions for goods that comply with the USMCA trade agreement.
  • Steel and aluminum, which already have separate tariffs imposed by Trump.
  • Copper, pharmaceuticals, semiconductors and lumber, all of which may be subject to future tariffs, the White House warned.
  • Bullion, which includes gold, a market upended by the fears of tariffs this year.
  • Energy is a big one. This means Saudi oil, for instance, wouldn't receive a new tariff.
  • Other "certain minerals not available in the U.S." The White House didn't specify which minerals, but this may refer to rare earths or other mined materials used in high-tech gear like batteries and phones.

Read more at the WSJ


China Hits Back Hard In Global Trade War With Tariffs On US Goods

China announced additional tariffs of 34% on U.S. goods on Friday, the most serious escalation in a trade war with President Donald Trump that has fed fears of a recession and triggered a global stock market rout. In the standoff between the world's top two economies, Beijing also announced controls on exports of some rare earths and filed a complaint at the World Trade Organisation.

It added 11 entities to the "unreliable entity" list, which allows Beijing to take punitive actions against foreign entities, including firms linked to arms sales to democratically governed Taiwan, which China claims as part of its territory.

Read more at Reuters


Bond Yields Plunge as Investors Seek Safety

A dash to safer assets sent bond yields around the world falling sharply Friday, with some touching lows not seen in months.Benchmark bond yields in North America, Europe and Asia all tumbled. Yields fall as bond prices rise, so the moves reflect increased demand for government debt. These bonds are considered among the safest assets investors can hold, meaning they often rally during market turbulence. Here's what's happening:

  1. U.S. Treasurys - The yield on the 10-year benchmark Treasury note is on pace to settle below 4% for the first time since early October.
  2. Japanese government bonds- The 10-year yield on Thursday suffered its biggest daily drop since the abrupt unwinding of the yen-carry trade in August. It fell further Friday, and was recently down 19 basis points, or 0.19 percentage point.
  3. U.K. gilts - Yields headed for their lowest end-of-day level since December.
  4. European bonds - Bonds broadly rallied in continental Europe, including Germany. The biggest mover in the region: Sweden, which isn't part of the eurozone. Yields had jumped recently in Europe on plans for a huge step-up in defense spending.

Read more at the WSJ


Trump And Advisors Offer Contradictory Takes On Tariff Negotiations—What To Know

President Donald Trump on Thursday signaled he is open to negotiations on reducing the reciprocal tariffs he announced on Wednesday for some countries if they make a “phenomenal” offer, contradicting statements made by his advisors and administration officials. Speaking to reporters on board Air Force One on Thursday, the president said his tariffs give the U.S. “great power to negotiate” and added “every country had called” to discuss them. Trump said his tariffs put the U.S. in the “driver’s seat” and now they’ll do anything for us.

When asked if this means he is open to negotiations on cutting back some of these levies, the president said it would depend on “if somebody said that we’re going to give you something that’s so phenomenal, as long as they’re giving us something that’s good.” As an example, Trump cited negotiations for the sale of TikTok to an American company and noted, “China will probably say, ‘We'll approve a deal, but will you do something on the tariff?’” Shortly after taking office, Trump signaled that his tariffs targeting Chinese imports could be influenced by how Beijing handles the sale of TikTok, as the social media company’s parent, ByteDance, will need the Chinese government’s approval to complete such a deal.

Read more at Forbes


How Trump's Tariffs Are Affecting Big Tech, Retailers, Automakers, Oil, And Bonds

In a spectacle at the White House Wednesday afternoon marketed as "Liberation Day," President Trump uncorked a baseline tariff rate of 10% that will go into effect on April 5. A higher tariff rate will start on April 9 for about 60 countries that the administration considers to be the worst trade offenders. Some of those nations are important sourcing and business regions for large US companies, such as Apple (AAPL), Nike (NKE), and Walmart (WMT). China, for example, will see reciprocal tariffs of 34%. Vietnam clocks in at 46%. Japan is at 24%.

Tech stocks plummeted on Thursday, with Apple leading "Magnificent Seven" names lower after falling 9% to erase more than $300 billion from its market cap. All told, the Magnificent Seven stocks lost over $1 trillion in value on Thursday. Companies are "rethinking everything right now," Telsey Advisory Group's Joe Feldman told Yahoo Finance. Investors fear that near-term margins will take a hit for major footwear players like Nike, On, Crocs, Decker), and Skechers, as well as sportswear players like Lululemon and VF Corp, all of which have high exposure to China or Vietnam. Investors also turned away from Target, Macy's, and Gap due to their exposure to manufacturing hubs like Vietnam, China, and Indonesia.

Read more at Yahoo Finance


NAM’s Timmons: The Stakes For Manufacturers Could Not Be Higher

The new tariffs President Trump announced Wednesday have left manufacturers in the U.S. scrambling—but there are steps the administration can take now to “minimiz[e] disruptions and cost increases across our industry,” NAM President and CEO Jay Timmons said. “Many manufacturers in the United States already operate with thin margins. The high costs of new tariffs threaten investment, jobs, supply chains and, in turn, America’s ability to outcompete other nations and lead as the preeminent manufacturing superpower.” Timmons said in a statement yesterday evening.

  • Manufacturers share the administration’s objective of bolstering “investment, growth and expansion here at home,” Timmons continued Wednesday afternoon. To achieve that goal, the administration should:
  • Minimize tariff costs for manufacturers that are investing and expanding in the U.S.;
  • Ensure tariff-free access to critical inputs used by manufacturers to make things in America; and
  • Secure better terms for manufacturers by negotiating “zero-for-zero” tariffs for American-made products in our trading partners’ markets (i.e., they don’t charge us and we don’t charge them).

“A clear, strategic approach to trade must be part of a comprehensive manufacturing strategy that starts with an urgent appeal to Congress to make the 2017 tax reforms permanent,” Timmons said. Those tax provisions acted like “rocket fuel” for the manufacturing sector and the American economy in general. Extending the measures that are due to expire and renewing those that already have expired will boost U.S. competitiveness again, he said.

Read more at Benefits Pro


Other Tariff Headlines

Fed's Powell To Weigh In Amid Tariff Fray, Market Drop – Reuters

The Rest of the World Is Bracing for a Flood of Cheap Chinese Goods - WSJ

A Market-Rattling Attempt to Make the American Economy Trump Always Wanted - WSJ

JPMorgan Raises Recession Odds For This Year To 60% - CNBC

Trump's Tariffs: What They Mean For The Economy And Your Wallet – Yahoo Finance

Oil Prices Tumble on Trump Tariffs and OPEC+ Production Hike – Oil Price

Trump Tariffs Are ‘Pure Madness’ And The European Union Should Not Comply, Former Italian PM Says - CNBC

Here’s What Will Cost More After Trump’s Tariffs: Coffee, Cars—And Possibly A $2,300 iPhone - Forbes

Donald Trump To Hit Countries That Buy Venezuelan Oil With 25% Tariff – Yahoo Finance

Opinion: Trump and His ‘Little Disturbance’ From Tariffs - WSJ